World Bank on Monday said it expects Indian economy to grow by 8 per cent this fiscal but asked the government to open up more sectors for foreign direct investment, encourage private sector participation and improve infrastructure.
"The overall economic situation is very positive. There is a very good chance of the economy to grow by 8 per cent this fiscal," World Bank vice-president (South Asia) Praful Patel said on the sidelines of a micro-finance conference in New Delhi.
India's GDP grew by slightly higher than 8 per cent in the first half of 2005-06, with a booming manufacturing and services sector.
Referring to Prime Minister Manmohan Singh's recent remark that India should target 10 per cent growth in the next 3 years, Patel said, "The distance of 8 to 10 per cent is very much achievable."
To sustain the present growth momentum and move up to a higher growth trajectory, he said the government needs to expand the role of private sector and encourage more FDI.
Citing the success stories of East Asian "tiger" economies, he said those countries were like India some decades ago but they carried out rapid infrastructure development and India should do the same.
In this context, he said the government should encourage public-private partnerships for infrastructure development. To attract more FDI and private participation, he said the government should allow higher user charges and not reverse its policies for private players.
The government should also make efforts to improve productivity, build rural infrastructure and step up public investment in agriculture, he said.
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